Government measure aims at cooling red-hot market before political meetings
Mainland stocks fell yesterday after the banking regulator warned lenders to curb loans that were illegally being used to invest in stocks.
The move is seen as further indication the government is trying to slow the market's rapid rise of the past few months. Analysts expect more measures to come.
'We issued a circular to financial institutions reiterating that the use of bank loans for stock investment is strictly forbidden,' one regulatory source said.
The Shanghai Composite Index, which measures A and B shares, fell 3.96 per cent to 2,857.36 points yesterday while the Shenzhen Composite Index dropped 4.28 per cent to 675.78 points.
The Shanghai/Shenzhen 300 Index, which is regarded by many industry professionals as the new benchmark, declined 3.3 per cent to 2,452.63 points.